Egypt's main index jumped 3.3 percent to 5,263 points, its biggest daily gain since March 27.
Investor sentiment was boosted by the naming of a new finance minister which also suggested the government was responding after renewed protests against what many Egyptians see as a slow pace of political change.
"There's positive reaction taking place in the market," said Mohamed Radwan of Pharos Securities.
Pioneers Holding was the main gainer, rising 6.7 percent. Ezz Steel added 5.3 percent.
Osama Mourad of Arab Finance Brokerage said the reshuffle was driving the market higher because it suggested that Egypt was moving toward greater democracy.
In Kuwait, logistics firm Agility tumbled 6 percent to a 12-month low, dragging the index after a US court ruled against the firm's attempt to avert prosecution over charges of overcharging the US Army in Iraq on supply contracts the US government says totaled $9.8 billion.
"A lot of people would've thought that news would've been priced in but it spooked the market," said Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading.
"It won't bring buyers back to the market at this price."
The Kuwaiti index slipped 1.6 percent to 6,069 points — its lowest close since September 2004 as none of the 40 largest stocks gained.
The benchmark has slid on worries over new market rules under which investment firms will need separate licenses to operate their lending and investment businesses.
In Saudi Arabia, the benchmark hit a three-week low as some investors moved to free up cash ahead of Ramadan. The Tadawul All-Share Index (TASI) ended 0.98 percent lower at 6,459.23 — its lowest close since June 25.
"There is a lot of uncertainty about what's going to happen in the next few weeks so people have booked profits," said Paul Gamble, head of research at Jadwa Investments.
"There is usually selling in the run up to Ramadan — retail investors raise money for a period of high spending."
Investors were little moved by Saudi Basic Industries Corp.'s (SABIC) surge in quarterly profit.
Heavyweight SABIC ended flat after its earnings jumped 61 percent and beat analysts' forecasts.
"Maybe people are thinking this is as good as it's going to get for SABIC for a while given the recent decline in petrochemical prices," Gamble added.
The petrochemical and banking indexes, the two main sectors, fell 1.5 and 0.6 percent respectively.
Abu Dhabi's index climbed 0.3 percent to 2,733 points to a four-week high, helped by telecoms operator Etisalat and banks.
Etisalat gained 0.9 percent, Abu Dhabi Islamic Bank rose 1.1 percent and Abu Dhabi Commercial Bank added 0.6 percent.
Volumes in Dubai fell to their lowest since December 2010, with many investors waiting for second-quarter results. The benchmark shed 0.2 percent to 1,545 points.
The Omani index eased 0.09 percent to 5,982 points.
The Qatari index ended flat at 8,484 points, while the Bahraini measure slipped 0.2 percent to 1,317 points.
